Cross posted from SHC, spoilers a foot!
Watching a lot of Slayers has opened doors to me on mythos in Asia, specifically Hindu, Buddhist, and Japanese folklore. I'm beginning to think the "false" god motif of the Eye of Night or "God" can be explained.
In Japanese myths, taken from the Hindu/Buddhist concept of Asura (another set of gods, later translated as "demons".) and Devas (gods), mazoku literally means "demon race" or "evil race". These beings, which higher level ones can be as powerful as gods, are beings that thrive on chaos. They feed off of negative emotions of people. Their opposites are the shinzoku, or literally "god race" that benefit from worship and positive emotions. Both races are from chaos.
I am thinking the "god" in Silent Hill 1 and 3 is a mazoku, and possibly in 4. But I want to concentrate on the first 3 games. In 1 God feeds off of Alessa's nightmare, in 3 it's Heather's hatred. This would be comparable to a mazoku. It causes chaos, it's monstrous, and the world is much too twisted to be paradise. It invokes negative emotions that it feeds off of. This make complete sense. It's pretty clear in 1 and 3 that what Dahlia and Claudia call god is far from it.
The gods [shinzoku] benefit from positive emotions, which can be compared to how the town was a sacred place to Natives. They are rarely seen, rather they are felt. Their influence is not as prominent looking as the mazoku, but they manifest in more positive ways and benefit from things such as Harry's love for Heather and James for his wife. I believe 1 and 3 is made by Alessa/Mazoku, and also Claudia later. And 2 is a shinzoku's work, who is never seen. 2 is a much more positive game because it's a man finding redemption.